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Hearing of the Subcommittee on Health of the House Energy and Commerce Committee - "Impact of Medical Device Regulations on Jobs and Patients"


Location: Unknown

The Subcommittee will come to order.

The Chair will recognize himself for an opening statement.

The United States is the world leader in medical device innovation. According to a recent report from Pricewaterhouse Coopers, 32 of the 46 medical technology companies with annual sales exceeding $1 billion are based in the United States.

And, yet, the U.S. is in danger of losing its preeminent status in this field.

Multiple studies have shown that regulatory uncertainty is damaging this critical industry and hurting American patients.

For example, the November 2010 study "FDA Impact on U.S. Medical Technology Innovation" surveyed over 200 medical technology companies.

They described the FDA process as "unpredictable and characterized by disruptions and delays."

They also noted that companies are able to make their products available to patients faster and at a significantly lower cost in markets such as Europe.

It's already tough for medical device companies. Only one out of four med-tech startups succeed. Half of all reported exits are less than $100 million, and the total pool of available investment capital is shrinking.

Quite simply, shorter, more predictable, and more transparent approval processes in Europe have led many device companies to seek a market for their products in Europe before submitting them to FDA.

And they are taking good-paying American jobs overseas with them.

In 2008, according to the Lewin Group, the medical device industry employed 422,778 workers nationwide, paid $24.6 billion in earnings, and shipped $135.9 billion worth of products.

In 2008, in my home state of Pennsylvania, the medical device industry employed 22,233 people and paid Pennsylvania workers over $1.1 billion in earnings.

These are good jobs. Nationally, jobs in medical technology pay almost 40% higher compared to the national earnings average.

But this trend does not just hurt our economy, it hurts American patients.

American patients, on average, have access to innovative medical devices two years later than patients in European countries, and, in some cases, never have access to these devices.

None of us would be concerned about longer, more arduous approval processes for medical devices in the U.S. versus Europe if we thought that those processes kept American patients safer than their European counterparts.

But, according to recent studies, medical devices marketed through the shorter and more transparent EU processes are statistically as safe as FDA-cleared or approved devices and have comparable patient outcomes.

According to a January 2011 Boston Consulting Group report "EU Medical Device Approval Safety Assessment: A comparative analysis of medical device recalls 2005-2009:"

"The results of this study suggest little difference between absolute number of serious recalls between the US and EU regulatory systems. The distribution of the serious recalls is similar across therapeutic areas and reasons for recall, suggesting that differences between the two systems do not ultimately affect performance. In addition, given the expectation that the EU approves more devices than the US it is likely that the EU recall rate may actually be slightly lower than the US rate."

We need to ensure that our regulatory system is consistent and transparent so American patients have timely access to life-saving and life-improving drugs and devices and American workers have access to these good jobs.

I yield the remainder of my time to the Chairman Emeritus, Mr. Barton.

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